Orange customers hit with 4% bill for New Year - and users have no choice but to pay

Orange customers on monthly contracts have been landed with a unwanted pre-Christmas gift after the mobile operator hiked bills by 4.34 per cent.

From January 8 2012, the firm is to put prices up for contract customers who signed their deals before the end of September 2011, blaming rising inflation.

It means the majority of Orange's millions of contract customers will have to pay a higher bill for the rest of their contract - which can be as long as two years - even if they signed up as recently as August or September.

Bill hike: Orange is adding 4.34% to monthly phone bills in the New Year

And the operator is not even giving customers the chance to leave their contract if they do not wish to pay the higher price.

This is despite industry regulations that appear designed to prevent such actions by operators.

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Orange said that a clause buried in the
small print allowed it to raise prices by as much as the retail price
index inflation - currently 5.4 per cent.

WHAT OFCOM SAYS...

The Communications Provider shall:

(a)
give its Subscribers adequate notice not shorter than one month of any
modifications likely to be of material detriment to that Subscriber;

(b) allow its Subscribers to withdraw from their contract without penalty upon such notice; and

(c)
at the same time as giving the notice in condition 9.6 (a) above, shall
inform the Subscriber of its ability to terminate the contract without
penalty if the proposed modification is not acceptable to the
Subscriber.

General
Condition 9 does not mandate that consumers must be allowed to get out
of contracts without any penalty when any term of the contract is
changed. Consumers have the right to do so only when the change to the
contract is likely to be of ‘material detriment.

In a statement Orange said: 'The increase in the price plan
charges is less than the 5.4 per cent rate of inflation as measured by
the Retail Price Index (RPI) in October 2011.

'Our pay monthly terms and conditions allow us to increase charges by up to the RPI figure in any 12 month period.'

The firm says that call, text and data rates will not be changing. A spokesman for Orange, added: 'We are confident that we continue to offer our customers great value and rewarding deals. All customers affected by the price increase will be contacted with full details.'

But the news is not going to go down
well with customers who have a monthly package and already face rising
household bills and the expense of Christmas – especially as Orange has
confirmed those locked into a contract will not be able to cancel.

That appears to act against rules
laid down by regulator Ofcom that allows customers to terminate a
contract when the terms are changed, where those changes cause a
'material detriment' to the customer.

But a spokesman for Orange said the rise in bills was not of 'material detriment' to customers.

They said: 'This change is not of material detriment to our customers. Our pay monthly terms and conditions allow us to increase charges by up to the RPI figure in any 12 month period.

'RPI for the last 12 months, as published by the government is 5.4% and we have increased prices by below this, at 4.34%. For example, a customer paying £15 a month, will see their monthly plan rise by 64p to £15.64 (incl VAT). A customer on a £20 a month plan will see a 86p increase to £20.86 (incl VAT) and so on.'

Orange is owned by mobile giant
Everything Everywhere, which also owns T-Mobile. However, T-Mobile said
it has no plans to put up prices.

ORANGE HAS TURNED INTO SCROOGE IN TIME FOR CHRISTMAS

This is Money reporter, and Orange customer, Lee Boyce is unhappy with the operator's scrooge-like price rise...

I have been an Orange customer for about 13 years and have never really had any cause for complaint.

But this price hike, announced with less
than a month to go until Christmas, is Scrooge-like behaviour and has
made me think twice about staying with Orange.

My £30 bill is going to rise to about
£31.30 – okay, that is only an extra £1.30 a month, but over the course
of my 24-month contract (which I took out at the end of August) will
result in about another £24 on top of the contract which I had
taken out. This is the equivalent to almost another months usage.

Of course, like many contracts,
the terms and conditions and small print will cover Orange.

But it’s
the principle and the timing of this hike which I think is unfair on
millions of Orange customers, who have stayed loyal to the operator.